World Cup predictions: Which banks get a red card?

As World Cup fever spread across the globe ahead of the tournament's kickoff in Brazil, it wasn't just fans gearing up to support their teams. The usually sober investment banks-turned-pundits also offered their predictions for the tournament. Here's how well they did.

Goldman Sachs

Goldman Sachs was one of the first banks to come out with a World Cup forecast, and its model has done pretty well in terms of predicting the position of teams.

The bank predicted a Brazil versus Germany semifinal with the host nation winning the game 2-1. The actual result, however, was a complete shock, leaving the Brazilian team humiliated as Germany hammered them 7-1.

Goldman wasn't the only one to take a hit on Brazil. Statistician Nate Silver, founder of the website FiveThirtyEight, also tipped the Brazilians to go the distance.

Goldman said the other semifinal game would be Spain against Argentina. Spain, one of the favorites to win at the start of the tournament, crashed out during the early group stages, but Argentina was in the semifinal against Holland. They knocked the Dutch out of the competition in a penalty shootout.

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Brazil versus Argentina was Goldman's final match fixture guess, with the home country expected to lift the World Cup at the end. But this was wrong again, as it's the Argentinians who meet the Germans in the final on Sunday.

"The predictions for each match were based on a regression analysis that uses the entire history of mandatory international football matches—i.e., no friendlies—since 1960. This gives us about 14,000 observations to estimate the coefficients of our model," Goldman explained.

The American bank failed to back its home team USA, although a strong performance by the team saw them make the quarter finals. The team narrowly missed out on a chance to progress further, despite heroics from goalkeeper Tim Howard.

Deutsche Bank

Deutsche Bank had perhaps the most outlandish prediction, slating England to go all the way and win the tournament—when not even British fans thought their own team could win.

The German economists' reasoning was clear: "With U.S. yields noticeably down, Ukraine the biggest (geopolitical) hotspot in the world and Athletico Madrid celebrating their first league title in almost twenty years, this year's World Cup looks ripe for an upset."

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A "quantitative model" for predicting the winner was used, and some "well-reasoned arguments" were put forward to arrive at this conclusion.

"Thanks to large presence of Liverpool players in the squad, England comes out as our predicted winner. The fact that one of the authors supports both teams is mere coincidence," authors Bilal Hafeez and Henrik Gullberg joked.

England was, in fact, kicked out of the tournament after finishing at the bottom of its group in the initial stages of the World Cup.

Jesting aside, the economists said that Spain also had a winning chance, based on past performances, a history of doing well on big stages and its talent pool. Germany, Brazil and Argentina had been slated as the next most probable. As such, Deutsche's model needs a red card.

Standard Chartered

High off its success of correctly predicting Spain as the 2010 World Cup winners, Standard Chartered said Brazil would lift the prize this year, firmly backing the favorites.

Brazil, Spain, Germany and Argentina were slated to make the final four, but Standard Chartered was another bank that put its faith in the Spaniards with little reward.

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The bank's economists did give a caveat, however.

"In football, a goalkeeper error or a referee decision can decide a game. In the current economic environment, where the U.S. is normalizing monetary policy, China is rebalancing and Europe is looking to revive growth, the biggest risk is a policy mistake; while we still expect growth to be higher this year than in 2013, such a risk could be a game-changer," Marios Maratheftis, head of macro research at the bank, said in a note.

ING

ING took a different approach with its forecast, focusing on the market value of a soccer team to decide the winner—and Spain came out on top.

"If the value of all the players in a football team actually could decide the results of the World Cup, Spain would prevail this summer as our analysis shows its squad of 23 has the highest total market value at 675 million euros ($918 million)," ING said in a note.

Germany followed close behind, with a value of 609 million euros, and Brazil came in third with 507 million euros.

Argentina has a team value of just 410 million euros, according to the Dutch bank.

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ING also looked at several other aspects of the World Cup—including how much money fans would be willing to sacrifice for their team to win the World Cup. Under this measure, Argentina came out on top.

Macquarie

Macquarie claimed to use the "pillars of quantitative equity investing" when producing its World Cup prediction, taking into account factors such as FIFA's official team ranking and betting odds.

Like many of its counterparts, Macquarie forecast Brazil, Germany, Spain and Argentina as the final four, with the Germans and Spaniards meeting in the final.

Macquarie said Germany would come out on top—a prediction that could come true.

Who will win?

Many of the banks had discounted the likes of the U.S. and Costa Rica, which were among the World Cup teams that did surprisingly well.

As the final looms, in the investment banking world it will be Macquarie and Goldman Sachs that go head to head, as both correctly predicted at least one of the teams in the Sunday's match. The rest of the banks have been left bitterly disappointed.

With Germany obliterating Brazil to get to the final, and Argentina grinding it out against the Dutch, the game looks set to be too tight to call.

—By CNBC's Arjun Kharpal